Option Investor
Updates

HOW ARE WE DOING?

HAVING TROUBLE PRINTING?
Printer friendly version

HOW ARE WE DOING?

The countdown begins. Four more trading days and a Friday morning settlement remain. Between you and me, I like our chances of recording our 46th profitable CPTI month out of 49. This December cycle, due to low volatility and scarce premium, we only put on two positions. Remember, if the water is shallow, don't dive into the pool.

Both December positions seem very likely to expire worthless and our month will, once again, be 100% profitable. But, it ain't over till it's over - or until the fat lady sings. Here are a few things to consider for this expiration.

Want to Release Some Maintenance Dollars?
Our December RUT 730/720 bull put spread is over 60 points out of the money. Currently, $20,000 is being held as maintenance for our 20 contracts. As the week goes by, you may want to try to close the spread for a nickel to release that $20K for use elsewhere.

Based on Friday's closing figures, the spread isn't quite ready to be unwound. But, don't let that stop you. Throw the order out there anyway. What the hell . . . stranger things have happened.

Our December RUT 680/670 and 830/840 Iron Condor may be ripe for closing. That's another $20K that could be made available if you need it. That's assuming you have the RIGHT BROKER and only $20K is being held instead of $40K. However, if only $20K is being held as maintenance, you will have to close both the bull put spread AND the bear call spread to release the funds.

The 680/670 bull put spread is currently so far out of the money that you can buy back the 680 put for a nickel. You would then still own the long 670 put - which has no value right now. It can't hurt to, after you buy back the short 680 put, put out an order to sell your long 670 put for a nickel. It could get filled. There may be someone out there with a 670 put they want to buy back to release maintenance of their own. If it doesn't get filled, you haven't lost a thing.

The 830/840 bear call spread is about 38 points out of the money. It's the only one that we have to watch at all. It may be able to be closed for $.10-.15. Maybe after the Saturday/Sunday time erosion, it will be less on Monday. Also, the 840 call has no value at this point and is not going to be any help in defraying the cost of buying back the 830 call.

Unless you need the maintenance dollars, or if you are concerned about the upside of the RUT this week, you may decide not to unwind the Iron Condor.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

S&P Support & Resistance - SPX closed Friday at 1409.84
Resistance:
1410 is an interim high from March 2000
1420 is a July 2000 low
1425 is an interim high from November 1999
1444 from February 2000
1475 from peaks in December 1999 and January 2000

Support:
1408 is the November high
1401 is a low from April 2000
The 10 day EMA at 1405
The 18 day EMA at 1399.78
1391 is the July up trendline.
1390 is the October high.
1389 is a low from November 1999
1378 is a low from May 2000
The 50 day EMA at 1377
1371 to 1373 is the December 2000 peak and the January 2001 peak
1358 to 1362 mark a series of peaks from April 1999 to August 1999 high
and the February 2002 low at 1360.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Dallas Here We Come
Thursday, I finalized the details for our next 2-day advanced seminar. We will be in Dallas, TX on March 10 & 11. I look forward to another great turnout and meeting more great people.

Early-Bird Special
You don't have to live in Florida to take advantage of our "Early-Bird" special. For traders interested in attending the Dallas seminar on March 10th & 11th, if you reserve your spot before January 15th, you will save $100. Give yourself a Christmas present. You deserve it. If you don't deserve it, give it to someone who does.

Where to next -- Washington DC or Boston?
I've narrowed down the locations for the next seminar (after Dallas) to Boson, MA or Washington DC on April 7th & 8th. What is your preference? Let me know which seminar you'd prefer to attend. Don't be shy. I'd really appreciate your input.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

An Oldie But A Goodie
Bill Clinton started jogging near his new home in Chappaqua.
But on each run he happened to jog past a hooker standing on the same street corner, day after day.
With some apprehension he would brace himself as he approached her for what was most certainly to follow.
"Fifty dollars!" she would cry out from the curb.
"No, Five dollars!" fired back Clinton .
This ritual between Bill and the hooker continued for days.
He'd run by and she'd yell, "Fifty dollars!"
And he'd yell back, "Five dollars!"
One day however, Hillary decided that she wanted to accompany her husband on his jog!
As the jogging couple neared the problematic street corner, Bill realized the "pro" would bark her $50 offer and Hillary would wonder what he'd really been doing on all his past outings.
He realized he should have a darn good explanation for the junior Senator.
As they jogged into the turn that would take them past the corner, Bill became even more apprehensive than usual.
Sure enough, there was the hooker!
Bill tried to avoid the prostitute's eyes as she watched the pair jog past.
Then, from the sidewalk, the hooker yelled...See what you get for five bucks!?"

Thanks to Hank S, CPTI Seminar Grad, who sent this joke. Heard any good ones lately? Send them to me. All ratings are welcome - PG, R, X
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

CURRENT DECEMBER CPTI PORTFOLIO POSITIONS
CPTI December Position #1 - RUT - Iron Condor - 792.56
With the RUT at about 760, we sold 20 December RUT 680 puts and bought 20 December RUT 670 puts for a credit of about $.45 ($900). Then we sold 20 December RUT 830 calls and bought 20 December RUT 840 calls for a credit of about $.60 ($1,200). Our total net credit and profit potential is $1.05 ($2,100). Maximum profit range of 680 to 830 -- 140 points!! Maintenance is only $20,000 -- IF you have the right broker.

CPTI December Position #2 - RUT - Bull Put Spread - 792.56
We sold 20 December RUT 730 puts and bought 20 December RUT 720 puts for a credit of $.50 ($1,000). Our net credit and profit potential is $.50 ($1,000). Maintenance is $20,000. We'll look for a bear call spread, but don't hold your breath. With the market trending up, we're probably going to be satisfied with the bull put spread.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

CURRENT JANUARY CPTI PORTFOLIO POSITION
CPTI January Position #1 - RUT - Bull Put Spread - 792.56
We sold 20 January RUT 690 puts and bought 20 January RUT 680 puts for a credit of $.50 ($1,000). Our net credit and profit potential is $.50 ($1,000). Maintenance is $20,000. If the market stops trending, we'll look for a bear call spread to complete our Iron Condor.

CPTI January Position #2 - SPX - Iron Condor - 1409.84
We sold 12 January SPX 1300 puts and bought 12 January SPX 1285 puts for a credit of $.70 ($840). Our net credit is $.70 ($840). We also sold 12 SPX January 1470 calls and bought 12 SPX January 1485 calls for a credit of $.60 ($720). Total net credit and profit potential of $1.30 ($1,560). Maintenance is $18,000. Maximum profit range is 1300 to 1470.

CPTI January Position #3 - OEX - Bull Put Spread - 652.22
We sold 20 January OEX 615 puts and bought 20 January 605 puts for a credit of $.40 ($800). Maintenance is $20,000. We'll keep watch for an appropriate bear call spread to complete our potential Iron Condor.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

ONGOING STRATEGY - THE ZERO-PLUS Strategy
In the past, I outlined a strategy based on an initial investment of $100,000. At that time, $74,000 was spent on zero coupon bonds maturing in about seven years at a value of $100,000. The principal $100,000 investment is guaranteed. We're trading the remaining $26,000 to generate a "risk free" return on the original investment. We are not compounding our profits by dramatically increasing the number of contracts we trade. We have now generated $51,050 ($47,250 + $3,800).

New Zero Plus Position: To Be Announced

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

CPTI SEMINAR SCHEDULE!
Dallas, TX - March 10th & 11th

If you really want to take your trading from a "hobby" to a potentially profitable "business," you need the information you'll learn at my CPTI seminar. You'll learn more than the "how to's" of trading our strategies. You'll learn a new lifestyle - one that can last a lifetime.

DO YOU HAVE PROFIT-ABILITY?
It's always a challenge (and a pleasure) for me when I have a roomful of bright people who have a passion for, and are excited about, learning. We go over everything imaginable - from the non-directional strategies to the psychology of trading. We cover a lot more than the mechanics. Inquiring minds want to know the whens and the whys, not just the hows. That way, they're prepared for the best (and the worst) - and know the best way to handle either situation. There are still spots open for Los Angeles. Contact me and I'll personally call you with all the details.

If you're a SERIOUS options trader, and you want to learn the nuances of our advanced non-directional trading strategies and hone your trading skills, contact me ASAP at mparnos@optioninvestor.com. I'll call you with all the pertinent information. The price is a bargain - ONLY $995.00 -- less than the profit from one Iron Condor trade -- and you'll have a two-day experience that you'll remember, and profit from, for a lifetime. Our CPTI seminars are limited to ONLY 25 ATTENDEES. Remember, if you attend one of my CPTI seminars, you are entitled to RETAKE the seminar a SECOND TIME at NO CHARGE!

45 OUT OF 48 PROFITABLE MONTHS!! - Soon to be 46!!
WANT TO ACHIEVE SUCCESS WITHOUT STRESS?
OF COURSE YOU DO!!
USE OUR CPTI WEALTH-BUILDING TECHNIQUES!

You should definitely attend one of my seminars, if you can. With what you learn, you'll see a substantial increase in your trading results. Contact me at: mparnos@optioninvestor.com. If you've already signed up, I'll see you there. If you haven't signed up, what are you waiting for?

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

HAPPY TRADING!
Remember the CPTI credo: Our remote batteries and self-discipline should last forever, but mierde happens. Be prepared! In trading, as in life, it's not the cards we're dealt. It's how we play them.
MIKE PARNOS, Your Options Therapist and CPTI Master Strategist

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Couch Potato Trading Institute Disclaimer
All results reported in this section are hypothetical. While the numbers represented here may have been achieved or beaten by our readers, we make no representation that any individual investor achieved these exact results. The tracking for the plays listed in this section uses closing prices for the day the newsletter is published and it is not meant to imply that any reader actually received those prices (though many often do) or participated in these recommendations (even though many do). The portfolio represented here is hypothetical and for investment education purposes only. It is only an illustration of what type of gains a knowledgeable and experienced trader might receive utilizing these strategies. If you don't get close to these results, guess what. It isn't the fault of the strategies.

Couch Potato Trader Updates Archives